JOINT COMMISSIONER OF INCOME TAX Vs. BUDH KISHORE

JUDGEMENT

(1.) THE department is in appeal against the order of Commissioner (Appeals), Rohtak, in appeal No. 460/BN/1997 -98, dated 19 -9 -1998.

(2.) THE first ground of the department's appeal is against the action of Commissioner (Appeals) in deleting the addition of Rs. 4,25,000 on account of cash found and seized from the residential premises of the assessed ignoring the statement of Shri Shiv Charan, accountant, and Shri Kailash Chand, brother of the assessed.

(3.) THE short facts are that the assessed is engaged in the business of retail trading in washing soap and washing powder. He also acts as commission agent for various dealers in oils and soap stock. The assessed had been accepting deposits and raising loans for investment in new issues of shares and in FDRs. He had also been advancing loans to family members and employees for investment by them in shares/debentures on which the interest has been charged from them at rates varying from 12 to 18 per cent. The assessed has also paid interest on loans/deposits raised by him at rates between 12 per cent to 15 per cent. A search under section 132 of the Act was conducted at the business and residential premises of the assessed, his sister concerns and other family members on 20 -10 -1994. During the course of search various loose papers/ documents/books of account and cash were seized against Panchnama. 4.During the course of the search operation under section 132(1) at the residential premises of the assessed a sum of Rs. 5,61,389 was found. As no Explanation was offered by the assessed, cash amounting to Rs. 4,25,000 out of Rs. 5,61,389 was seized. The assessed vide letter dated 14 -10 -1997, was required to explain the same. In response thereto, the assessed vide his reply filed on 26 -12 -1997, stated that the cash belonged to different sister concerns of the assessed as mentioned below : <FRM>JUDGEMENT_133_LAWS(DLH)8_2003.html</FRM>